TWIA Transfers $262M Into Catastrophe Reserve Trust Fund

The Texas Windstorm Insurance Association has transferred $262.7 million into its Catastrophe Reserve Trust Fund as a result of its 2014 operations.

The transfer brings the CRTF total to its largest balance at roughly $480 million. As part of overall projected funding of $4.9 billion for 2015 it ensures sufficient funding to pay insured losses from a 100-year storm season, TIWA said.

A strong CRTF is crucial to help pay future storm losses in a timely manner, and according to TWIA’s governing statute the CRTF is the first funding source to be used to pay insured losses, after premiums, and all net gains from TWIA operations must be transferred into the fund annually.

TWIA now has more than $1.1 billion in cash immediately available to fund losses from 2015 premiums, the CRTF, and $500 million in pre-event Class 1 bonds issued in 2014, according to the group.

TWIA said operational efficiency is key in ensuring sufficient, yearly contributions to the CRTF. TWIA reportedly has the third lowest cost of the 36 U.S. property insurance plans as a percentage of premiums, and expenses to run the entire association were only 5.5 percent of premiums in 2014.

TWIA is the state’s insurer of last resort for wind and hail coverage in the 14 coastal counties and parts of Harris County. TWIA provides wind and hail coverage when insurance companies exclude it from their homeowners and other property policies sold to coastal residents.